The Sensex, which lost nearly 323 points in the previous day's trading, bounced back to close 276.85 points higher at 9,323.59, after touching the day's high of 9,342.47 points.

The 50-share National Stock Exchange index Nifty shot up by 91.75 points to 2,828.45. It surged to the day's high of 2,835.65 points. In Singapore, Nifty futures for January delivery added 2.1 per cent to reach 2,768 points.

A steep rise in oil and gas sector stocks, led by Reliance Industries, contributed to the current rally. The climb was fuelled by reports of better overseas trends backed by news that the US government has rescued a beleaguered bank and triggered hopes that the move would help revive global appetite for risk.

Marketmen said the upsurge in financial stocks was on the back of reports that the US government was injecting USD 20 billion into Bank of America and giving a guarantee of almost USD 100 billion for potential losses.